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Renewable energy and efficiency loans for UK homes

The UK Government has announced a new strategy to make UK homes more energy efficient and increase use of renewable energy.

The Greener Homes Strategy aims to cut emissions from homes by 29% by 2020 by giving up to 7 million homes eco upgrades by 2020, including renewable energy installations, whilst creating up to 65,000 jobs in the green home industry.

The strategy for energy efficiency and renewable energy will be implemented in three stages:

  • Insulate 6 million homes by the end of 2011;
  • Insulate all practical lofts and cavity walls by 2015; and
  • Offer up to 7 million eco upgrades by 2020 with all homes having smart meters.

Ed Miliband, Energy and Climate Secretary, says: “The Warm Homes, Greener Homes Strategy will remove the deterrent of upfront costs and reduce the hassle of the move to greener living.

“New ‘pay as you save’ green finance, a new alliance between energy companies and local authorities to help people in their communities, as well as moves to encourage landlords to stop ignoring energy wastage in their properties, will help deliver the radical transformation that’s necessary.”

The ‘pay as you save’ green loans for energy efficiency and renewable energy measures will be tied to properties instead of individuals.

Housing Minister John Healey has also announced an additional £2.5 million to provide a network of Green Show Homes. “People will be able to see first hand what a refurbished green home is like to live in, and the new technologies they can use to improve the energy efficiency of their own homes and save money on bills.”

Increased property value with renewable energy

Scott McLean, Marketing Director of newly established Ownergy, a UK service provider of renewable energy systems, says: “Passing on loans for renewable energy systems to future property owners should not be a problem for two reasons. Firstly, the tariff income from any eligible renewable energy systems should be able to cover all or part of the loan repayments. This will mean that the property owner sill benefit from far cheaper energy under the feed-in tariffs or Renewable Heat Incentive schemes, whilst using the tariff income to make all or most of the loan repayment depending on the loan’s payback period. After the loan has been paid off, the property owner will receive the benefit of the tariff income as well.

“Secondly, because properties with renewable energy systems that are benefiting from the tariffs will be receiving an annual income from their energy generation, we firmly believe that this will increase the value of the property. With the market not yet launched it is not possible to say exactly what the increase to the average property will be but it seems common-sense to believe it should cover the capital investment.”

Who is responsible?

Head of Energy at property consultancy Carter Jonas, Andrew Watkins, says attaching the green loans to properties is fine – as long as all is working to plan: “If it isn’t, there could be a minefield of issues as to who is responsible for what if there are problems down the line.”

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